Leaving Benchmark for … Balderton ?
The surprise split of Benchmark Europe from Benchmark was announced to the Financial Times on Friday. Whilst there had been some rumblings about a tense relationship between the two groups,it’s fair to say that most people I spoke to did not see this coming at all.
Partnerships are living organisms and there are many reasons why partners decide to go their separate ways. If we can hazard a guess as to why the split happened, here are possible drivers:
because they can
- because their branding was divergent (late stage)
- because they kept investing in competing businesses (e.g. Zopa, Prosper)
- because they did not get India and China off the ground in time
Benchmark Europe was probably originally paying a hefty portion of its carry back to the mothership,but according to PE Hub this was not the case anymore and hence cannot have been a major driver.
Europe has added some strong "incoming" individuals (such as Maloney, Kreiz) and benefit from having one of the nicest and most experienced people in Euro VC land (Coelho). Whilst they have had no exits so far that I can think of, there are some fantastic stories in there (even leaving aside the lucky break on Flutter / Betfair) such as Setanta, Sulake, Yoox or Alphyra.
I bet you can count on some big exits prior to their next fundraising.
What’s in a name ? Well of course it’s the street they’re on. It’s a tradition in private equity and hedge funds to name your fund after your location, but this not exactly a name that rolls off the tongue. Not quite Duke Street. But it sounds very private equity or even hedge-fund like and is in line with their new late stage positioning.
But I am sure these guys don’t really care, after all they just ditched a global brand at a time when most large funds (Sequoia, Accel) are exporting and globalising their brands agressively. This must come as a blow to the US Benchmark at a time when their competitors (Sequoia, Matrix) are succesfully entering India and China.
Either that or it’s a bold statement that venture partnerships do not globalise well at all. Returns, after all, are really what matters.
UPDATE: I am getting some really conflicting information about this, namely that the US possibly pulled the plug which is why there was no time rebrand etc. Not my job to speculate, but you could read the news from a completely different perspective. The salient fact remains that some are globablising whilst others are not. What’s interesting of course is to think through what matters most: a global platform or the power of 5 people around the table in a single location making all the decisions. Is venture really as global as the companies that it funds ?
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